anna: three fed president say the central bank should start discussingsing how to unwind emergency era measures. says the u.s. economy faces no serious short-term obstacles. manus: china's central bank has asked some banks to stop processing cross-border payments. anna: the u.s. is accused cheating laws. shares have plunged in the u.s. yesterday.

♪ a very warm welcome. "bloomberg technology" bits: the dollar has had a of a rough and tumble week. down .1%. trade whichnsensus lacks conviction. that is what our 7:00 guest said. that affairs it very quickly. this is a january effect. this is what we've done so far in january. year, and down it went. is january a real indicator? of typicallyverage what happens on the dollar over the past number of years. the blue line is 2015. january, should you take it as a precursor for the rest of the year? morgan stanley say

reflation trade is still intact. anna: buy the dol as a result. lar let's have a look at the rest radar. we need to focus on where it is going. up .1% for the dollar index. we have the chinese currency in there for you as well. pbocse of this story stepping up control, matching incoming and upcoming u.n.. and messing -- a message for the chinese bank. deterring the outflow of chinese currency. manus: almost as if they are throwing every thing as it's right now to stop the possibility. i went with the possibility is calling chinaump a manipulator on his first day. up .1%, the pharma got smacked.

the msci world index, something that caught our eye. global equities are holding onto the gains for the year. he jumped 1.9% last week with just away from a record. 3% below the lifetime record in 2015. it is still fairly well. anna: some of the details stories moving around in asia at the moment. a couple of good stories over there in asia on that sector. let's get to the first word news for you. marianne. : china's exports remain subdued as weak global demand weight on sales. oversee shipment in december fell 6.1% in dollar terms. 3% tos rose more than leave a $41 billion trade surplus. the largest exporter chases more calexit -- challenges this year as it prepares for potential brazenness with the united states.

asking them to stop crossborder yuan payments. the direction was given verbally, requiring them to show up at the end of every month the amount of outgoing matching the enough that comes in. to -- attempting to curb a record amount of money leaving the currency. -- the u.s.s. environment protection agency surgingy were putting vehicles allowing them to exceed pollution limits. the company contests the allegations set it met all revelatory requirements. requirements. whether or not james comey will

keep his job after the internal watchdog opened an investigation into his handling of hillary clinton's use of a private female server. the inspector general will examine whether the fbi failed to follow appropriate procedures as he improperly release information. a campaign ceo said the company a merger with time warner did not come up when he met with donald trump. the pair focused on jobs and making u.s. firms more globally competitive. the transaction was set to be discussed with trump who opposes the deal. founder of sky bridge capital has been named an assistant to president-elect trump. according to people familiar with the decision.

investing in goldman sachs, joining the new registration as an assistant to the president and senior counselor for economic initiatives. barack obama surprised by president joe biden by the stowing the presidential medal of freedom on him. yet going president called him an extraordinary man with an extraordinary career in public service. it also said it would give the internet one more chance to joke about their bromance. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg top . thank you very much. architect have had a interesting week. trump and policy and the lack thereof. asia stocks at a three month high. samsung is in the sidelines.

yes, it certainly has been an interesting week for asian investors. a bit of a mixed end to that week that we are seeing. we did have movement coming in on the shanghai after the export data came through. it was pretty sluggish and they took it and tried to strike. interesting to see the hensing back and you lockout of the last seven sessions. it has been higher. weakness,e have seen down .1 -- .5%. up byg the nikkei hire .8%. it was pretty weak across that corner of the world. australia down .8%. by 0.6%.he week off if you rallied into the bull market territory. stocks to keep your eye on in the asian session, morgan

stanley saying it does have government support. takata -- -- nintendo falling in tokyo. 299.99ed the consul at with all the market moving action and information on the consul market as well. says the u.s. economy faces no serious short-term obstacles. dealing with more long-term challenges as low productivity and blowing -- growing inequality. one successful's economy is not attracting media attention. we are doing work successfully our hope is the economy will generally function

well. happening instead of being on page one we can get back on page 19 in the newspapers, not in the headlines. anna: the treasury rallied, we have seen him it is because about to end. yields will move higher. joining us now from singapore's nick. ahead of multi-asset solutions. -- we are trying to put in perspective what we've seen. what is your call. given the number for the u.s. 10 year. is the inflection point actually happened around the middle of last year, around june. after u.k. independence day. that was really the major

inflection pointing in bond yields. what we have leading into that was everybody was concerned about the trend growth, low inflation, low rates and the permanent rager -- nature of that. that's what the case, your greatest risk was higher. did was u.s. election light a fire under that trend. we have seen a pretty significant move up in yields. a stabilization from the middle of december. that is when we took a short position off. we actually allocated back to the u.s. treasuries. since then i have cut that position and effectively put the reflation trade back on by cutting all of my treasury positions in the portfolio. interesting that you use one of phrases,ssic market

dropped out of the dollar and dropped out of the treasury. weekdid you learn this from the bond market question mark -- market? week from the bondnick the dollar ite dollar is clearly a consensus belief for a trial -- crowd of trade. we have seen stabilization of the last 24 hours but a significant pullback in the dollar. that might have just reflect a positioning. macroy perspective the news flow in the u.s. is really strong. surveys this week and last week were incredibly strong. we should see that starts to get reflected in the macro news flow. the hard data. to further lead treasury yields and another move higher in the dollar. one of the big insurgencies is how cumulative

donald will be with fiscal policy. suggesting this might be a question for 2018, is is a question for this year or does this year look more protectable? the uncertainty for physical is a problem for 2018 and not now? nick could be immediate. markets price the things more rapidly than policymakers. the way they think about this. the fact we have had a reasonable consolidation is one of the reasons why i put the reflation trade back on. in addition to cutting treasuries to zero, i added back to u.s. financials which is a sector position. we have 10% of the portfolio in that position. a fairly aggressive position. u.s. financials still trading at a significant discounts to global equities and the broad market in the u.s..

people pessimistic were skeptical about returns or profits for the financial sector so we still see that as a multi-quarter trade. you have the disadvantage -- i have the earnings yield for the s&p 500, relative to the 10 year government bond yield. that is widening. does that trade continue with renewed momentum? nick clearly the u.s. market overall is more expensive. we would have a preference for emerging markets with the earnings yield at 8% were 8.1%.

that would be my big trade for 2017. look to take on the episode in emerging markets because in contrast to the u.s., which is growth expeditions, emerging markets have rolled over. anna: thank you so much for joining us. multi-national solutions -- , is thattion trade still of the major dominant seen a for you take seriously the way the dollar fell out of bed yesterday? manus: the reflation trade is one way but another way is that we have the best economic backdrop since 2007. our pointing up in a number of

countries like u.s., u.k., germany, japan, china. are you excited about china because what has happened there is not only does the economy look rather solid but also we have seen a reduction in the real interest rate do to rising inflation which is obviously very stimulative. it looks fairly optimistic and that is what is driving inflation expectations this year. do,s less what trump will he is still undecided or unannounced, the economic backdrop this year looks fairly attractive. manus: the markets react emotionally. -- they havehe fed done this before time and time again. it could be more than three because we are looking at full employment. manufacturing industry is recovering since mid last year which is a trend.

expenditure is staying up there. if a trump really follows through with tax cuts than this will be even more. it could not be that the economy is halted -- hotter at the end of the year than it is now. anna: bloomberg will be speaking to the former u.s. defense secretary. that at 10:00 in the evening. wall street earnings get on their way, jb morgan, bank of america, wells fargo reporting before the open. 1:30 anna: theat ruling cdu party begins a retreat where angela merkel will start setting her agenda. manus: tanks in the u.s. trading now. diesel commissions cheating by the u.s.. will follow volkswagen and pay big?

anna: it promises is a promise. close to a two-year low. the conveyor belt slows at the factory of the world. china's exports stay sluggish as the country races for a possible trump trade attention. this is bloombeg.

anna: welcome back. this is bloomberg "bloomberg "bloomberg-- daybreak" nintendo shares fell after the switch goes on sale and march 3 at the price of $300. a new feature, an online gaming network. the price is higher than most predicted and above the ps4 and xbox one. down aselectronic share

the vice-chairman faced 22 hours of questioning. a suspect in south korea's influence scandal. investigators have set charges to including allegations of embezzlement and breach of duty. the heir to the country's richest family has denied any wrongdoing. surge -- surged in tokyo. they may announce a settlement --soon as today over airbox airbags late -- linked to deaths. as much as a billion dollars and face possible criminal charges. -- a settlement would allow him to move forward with these search for a buyer. manus: thank you very much. accused of violating pollution laws in the united states, the wouldleges the company suffer more than -- put software

in more than 100 thousand vehicles allowing them to exceed limits. let's head to berlin and bloomberg's manager in -- managing director. benedict, expecting some to --benect5i 0-- benedict: fiat took a major hit. they have added software to about 100,000 engines in grand cherokee and raima cars. there is a notable difference that i think was important to point out. a defeatid not call it device, they said there was software with questions about. it was not properly registered and so on. that is one notable difference. there are far fewer cars, it is

only about 100,000. in folksong we are about 11 million songs. the reaction, a very forceful ceo coming out and calling it hogwash. disappointedvery by this and that's really shows this company is willing to fight back. hads been blindsided, meetings with the epa a meeting despicable of weeks before and everything seemed fine. here's a company really coming out fighting back. after the initial hit they did come back. sayingsergio marchionne this must be an understatement. is been a charge of the company for quite some time. the potential numbers that we are looking at, put it in context. $23 billion. i am. what would that mean.

--? is that civil and criminal together? benedict: we don't know how that will break down. derived fromillion the number of cars. that he is kicked off this probably not directed at his own engineers brother the epa. you raise an interesting point, volkswagen is a company that is a lot bigger and deeper pockets. $20 billionsorbed in fines and levees. most would be bankrupt under such a waste. this is something that will be very difficult for fiat to absorb. marchionne does have a reputation on the line. anna: thank you very much. joining us from berlin.

cio at theack to private bank. this is a sector that not only faces the regulatory challenge but also faces the twitter challenge from donald trump. he tries to intervene in the decision of making businesses. the auto sector seems insight. does the overlying potential the sector overline those? is stillhe sector is writing strong citi trends in solidlogy is still fairly and also meets the mind of buyers. obviously everybody has set their mind on what regulation will do in the u.s. and but through donald trump if there was a border preferred place to ship from the auto industry is south of the border in mexico. autoco the impact the

industry massively. this is very much on their radar screen. manus: look at volkswagen and fiats. when you look at the stories do you shift gears? in terms of propensity and exposer? they are a specific case and until we know exactly what of the lawsuits will be it is very difficult to say how that's will impact the bottom line. fiat-chrysler very strong. a different case because they have a u.s. american parts to it. very different cases. anna: staying with us on day rate. much more to discuss with him. the china story which we will go into. oil productions near and on the

-- a low. a big move as we head into friday. this is bloomberg.

-- in 6:30 in afternoon london. the dollar-yen is on the move but we will take it anyway began. 118 .86. hopefully you have gotten used to it now. this is what we are looking at. we have been covering this story in the last couple of minutes with our orders in europe. thefocus is fiat, calling ceo saying he is really ticked off by the solution allegations. , 4.5ay the numbers look billion, nowhere near the scale of bmw

great insights talking about the differences between this story and the bmw story. the next story looks at the fed's speakers reinforcing the tightening case with some caveats. little opportunity to talk about the fed this morning but a great insight on whether the inflation trade is still on from our guest in singapore. he certainly believes we are going back to that as bond yields go higher. manus: daybreak also has the story on russia's governor who is set to speak at a four-run in moscow.- forum in guy: we are affecting a positive performance from the ftse. the ftse 100 looks like it will be opening up around .5% according to the activation on your bloomberg this morning you outperforming its continental --

how fiat opens a little later. has not been the sterling but what is going on with the dollar. the dollar has been week, one of the big trades as we work our way out of this reflationary emphasis. the dollar has been the real story. the greenback has come under great selling pressure. we are beginning to bump up, indicators that may provide some upside momentum into next week. talking about no major obstacles for the u.s. economy. something of the want to mention as well because this has been the theme. we concert back to sterling and talk about the week liquidity's. this has been a medley morning for what has been happening with the dollar and the turkish lira. this is where week liquidity is an issue. that is where we see some of the biting of the dollar t.r.y..

it has been interesting to see how the liquidity stories is working its way through and how bad it is increasingly a feature. if this is just regular flow that has been preprogrammed or taking advantage of small movements? extrapolating them a little further. there is continuation but i want to hold at a big point. -- highlight the big point. placeend is back in surrounding what is happening with gold. nice to see some of those formations still working. back to you. that's get to oil, the saudi arabian defense minister has said the oil production is 10 milliond to

barrels a day. below the targeted level. anna: saudi arabia will consider renewing its pledge to cut out in six months. it comes as oil and us 10 millin barrels a day. below the targeted level. -- ministers hold the many opec in on without me. us for a conversation about the meeting now. however oil prices reacted to the latest comments? up,rter: we saw them move the very important meeting here. as an unofficial meeting. i just spoke to the energy minister and all the spec elation about a many opec, there is no truth to it. a casual conference. we might be having dinner later. you mentioned saudi arabia, this became a little bit of a surprise in terms of saudi arabia going beyond the call of duty. under 10 million barrels per day, the last time that happened was february 2015.

the role ofng leadership within opec. goingre committed and beyond that. similar signals from kuwait, from l syria -- algeria. anything else that anybody wants to do that is up to them and it is a bonus. me get you a little bit of this tells you the story of two heavyweights. thenon-opec elephant in room. you are looking at opec production. you can see how it falls off of the agreement comes into force. when you also see in the tellsop, the histogram the story of u.s. current inventories which remain at the highest seasonal level in three decades. that is the kind of oil in the system that needs to start getting out of the system for oil prices to really rally behind $625 per barrel. manus: he say today is perhaps a little more laissez-faire.

what do you expect? is this a show of strength from the core of opec trying to set a roadmap for those nonmembers? i am challenging russia, giving our bit to you. reporter: light muscle flexing. nothing formal is on the agenda but the fact we are here and talking and continuing to follow up with the monitoring committee in terms of building a clear agenda for the way forward in terms of making sure that you are measuring the barrels correctly and everybody is on the same page, it is an enormous logistical challenge. a historical track record of when coverage says it has been 70%.

if you look at 80% this time around and your surprising the market a little bit, you're going above the call of duty, you might be able to push prices even higher. it very clear stand from the ministers that are presenting at the meeting and we will continue to follow them very closely. a few more conversations today to get a better sense of whether anything is in the pipeline. for: thank you very much joining us from a debbie. a busy friday in other debbie on the manus: oil story. the export numbers for china, cannot. global demand weighing on sales commodities shipments down by 6.1% from december. asking some banks to stop processing y cross-border yuan payments. anna: marcus from the lloyd's private bank joining us in the studio. you said earlier on that you are quite upbeat on china.

the growth they have managed to secure. do you not get concerned when you see yet another story from the pboc trying to limit the outflow of the currency? does that not worry you that that is what is going on above the water, what is happening below? marcus: it clearly is a? mark.on it has made us successful in otherng the balance with challenges of the chinese economy. i don't think it is a particularly big risk that will get in the way. managera purchasing indicates that manufacturing link -- looks upbeat. we also see retail sales picking up and i was stepping way from monetary policy but looking at monetary indicators. pretty excited about the

interest rate. over 5% during the last six months produced a huge boost for the chinese economy. manus: the one thing that jars bell. mind, a ringing and thet this data white line is where our viewers are focused. yuan, underthe wiki u.s. consumers. -- we all being the first one to get on the reflation bus? i want a ticket and to be at the fronts. this does not convince me. it is not as much about the export. the global economy is doing well. it is about the rustic demand in china picking up decently and

that would be helpful for multinational operating in china and companies selling into china. what china buys as a domestic economy than what it sells to the world. boeing.eaking news on boeing winning a $22 billion order from india's budget carrier spice jet. 205 planes including purchase rights for 50. all of this in a statement in order for boeing aircraft. 22 billion, looks to be higher than had previously been expected. big questions about the china story. depending on what he wants to do with any terrorists.

where is china do you think? be the exportsd into the u.s. and it's all depends on the trade policy that the trump administration is going to put in place. we brought hoping to hear more about that this week i think we still have to wait for a couple of where -- weeks as we -- at least. ,or the chinese economy itself or to be looked at this self, from a negative trend in it imports. if you look at the orange line you see that imports have been ticking up. it is more of a domestic demand story than an export story. on --is still commitment dependent on exports. manus: a conversation with hsbc, you are talking about not

standing in front of the truck bus. that's was david bloom's wine. i get this sense with the pboc it may be piecemeal as it comes along but this is a central bank that for me is defending the most clear message to the market yuanthey don't want the runaway trend. the market is split. how do you read those? marcus: two key elements. clearly the pboc has been late in managing currency to align with the global trends. still more reflation to come differently. no central bank will want to live with high currency volatility. that is what they are looking at. depending on market forces they

will manage accordingly. theynk they will --anna: will not let us go? will not be a massive surprise, it's will be a steady process. clearly we don't know about unknown unknowns. comp is a big unknown. that is where we stand now. basically that is what i think about the pboc. anna: thank you. cio of lloyd's private bank. manus: bogus's ceo out the the earnings of the top of the next hour. anna: janet yellen sees no serious short-term obstacle for the u.s. economy. the best christmas in years. could wall street post-its strongest third quarter since the financial question -- crisis? this is bloombeg.

anna: welcome back. this is "bloomberg daybreak" europe. a positive start the u.s. trading day perhaps. of course we have to get europe out of the day. here is juliette with a business flash. thank you. nintendo shares have fallen in tokyo trading after announcing details of its new gaming console. the switch will go on sale on march 3. it will cost $300 and comes with a new feature, and online gaming network. the price is higher than most analysts projected and above sony playstation for and microsoft box one. electronics shares have fallen after the chairman faced 22 hours of questioning as a suspect in south korea's scandal. investigators have said charges may widen to include allegations of embezzlement and breach of

duty. the air to the richest family has denied wrongdoing. chairman,s made a popularly known as chandra. the head of the biggest software exporting services since 2009. in the time his profits quadrupled and these talks tripled, becoming india's biggest company by market value. he is also on the board of india's central bank. surged int shares tokyo trading as the troubled company and the u.s. justice department may announce a settlement as soon as today. the airbags linked to 17 deaths worldwide. a could pay a fine as much as billion dollars and possible criminal charges. a settlement would allow it to come to to search forward with a search for a buyer area manus:

thank you very much. have a great weekend. cio of lloyd'she private bank. big picture for the year, we had a quick look at your outlook for 2017. persistence -- i would raise the i am constantly on the edge of my seat. i can't see the germans giving any money away. countries arel moving away from austerity. it is less that they are putting see fromsomething we the donald trump and part of his campaign, promises, tax cuts, and for structure spending. stimulustory on fiscal . increasing government spending.

it doesn't need much, bear in mind. since we have full employment in several countries not just in the u.s. and the u.k. and germany. major economies which are already relatively full capacity. to outlook cap is close zero. we're crossing the line. it doesn't need much on top of everything else and consumer expenditure. we have solid wage growth in these countries as well. bear in mind, we talk about europe later, but there is a significant rebalancing going on within the european economy. what is the best reason for buying european stocks. is it the thing you just highlighted? profit margins and the fact that they need to catch up to mark marcus: the biggest story is the rebalancing of the economy to domestic demand. for the first time in two decades we are seeing rising

residential real estate prices in germany. we are seeing rising real wages, on employment. people are spending in germany. germans always are a frugal people but they have certainly changed during the last two years. for the first time in a long time. the reforms cloud the labor market for years to come. we've seen rebalancing and that is very important for europe. the mystic demand in germany will help all the other countries selling into germany. suppliers but also consumer goods. manus: let's pick up on europe. ftse was up 14%. effect, strip out the you can see paris has been outpacing in 2015.

where does france sitting of how you look at europe? marcus: france is the most difficult position because it .as relatively low productivity definitely the french economy is behind. surprisingly, has stayed relatively positive. real wage growth in france has kept up quite nicely. if you think about the socialist environment france is in. tuesday will give us a bit more detail. we don't know how much more detail on brexit and what those cards say. what is the risk for the

pound? down to of it doubling 1.1. i know you see risks down to 1.1. what would have to happen to trigger that? define the hard brexit that would result in 1.1. marcus: we are little -- moving more closely to a hard brexit. aggressive for theresa may and that is when the currency weakened considerably. at the end of both of her last speeches she produced her bolder statements. we need to wait and see but the probability is slowly rising for a hard brexit.

does that mean coming out of the single market or is there a difference between that and a orderly process? the defense between that and crashing and i'm finding it hard to distinguish an orderly transition and chaos. marcus: they in -- bear in mind we need an agreement between the u.k. and the european union. one agreement on the divorce and one agreement on the future states. we also need transition agreement. what is happening in the u.k. now is the government is getting a position of unity. on how think the views the negotiations should go are unified. unless something or unforeseen happens that we will learn how the negotiations actually go. on both sides we have seen a lot of statements prior to article

50 being triggered. after that milestone everybody will focus on the negotiations. i don't think they will much happen in the public. in terms of benchmarking the u.k. journey switzerland is a relatively good example. a trade agreement with the .uropean union, is not signed anna: it will take a while. in canada and greenland. manus: nobody wants to hear the 10 year number. least of all number 10 down the street. you will not get an invitation to see that. let's talk about the u.s.. you make the point that profitability of u.s. stocks has been falling. it peaked two years ago.

repatriation of overseas earnings, they are making $200 billion. does that sustain the u.s. equity position? are you a big bowl on the equity decision? what is mainly behind the recent decline in the earnings yield is that profit margins have come down from 9.5% to 8.5%. that is driving the decline in a yearning field here. that is going to continue probably going forward. anna: think you very much for joining us. cio of lloyd's private banking. manus: up next more clues about the housing market. in a moment they will report sales. what was the average selling price, what can we expect. by in the words of

short capital, poor execution. they've changed the ceo and david ritchie will discuss what they have to offer to the markets. this is bloombeg.

manus: shanking the balance sheet. centralesident says banks should discuss how to unwind emergency air it measures. for the u.s. economy faces no serious short-term obstacles. china central bank has asked them to stop processing cross-border yuan payments until inflow matches outflow. manus: emission scandal motors accusedsed -- fiat-chrysler of violating laws with more hundred one -- 11 2000 00,000es by letting -- 1 vehicles violating code.

♪ manus: welcome to bloomberg -- "bloomberg daybreak" anna: breaking news to come through, numbers expected this morning. let's talk about what is happening in the european equity markets. a little stronger at the start of the european trading day. u.s. markets were weaker, down by their .2%. reversing the losses of the previous day. howyone questioning just right the consensus is. that brought many asset classes into question. manus: it did indeed. maybe we just have a little bit of a shakedown.

that personifies -- pboc throwing mud at the wall trying to stop the yuan. they have to stop transactions unless they can balance the books. dollar-yuan seems to have paul. anna: pausing for thought toward the end of the week. yesterday we saw dollar weakness coming through with donald trump --manus: it was a shakedown wasn't it? anna: moore to be expecting too much if we thought he is going to lay out policy. 20 of talk about russia. what we have been over the last couple of hours. down by .1%. the futures in there for you as well suggesting we could be stronger at the start of the trading day in the united states. manus: bond markets, interesting

, moves 2.37. what does it take to move those yields higher again in the united states of america? that is the debates. we have pulled back a little bit. and bondng auctions yields, 30 year -- 30 year wants demand was not insatiable. just taking down. japan, what will the bank of japan -- japan due to defend their position? anna: let's get caught up on the first word news. turn exports remain subdued as weak global demand weight on sales. oversee shipments fell 6.1% in dollar terms while imports rose more than 3% to lead a $41 billion rates are. the largest exports have faced more challenges and embraces the potential trade friction with the united states under a donald trump presidency. manus: the presidency of the china.d -- in

accepting yuan -- will stop accepting yuan util they match inflow and outflow. that comes as authorities step up the campaign as a record number of money is leading the nation in local currency. close 10%chrysler lower after being accused of diesel omissions. the epa says software was put in certain vehicles allowing them to exceed pollution limits but hasn't stopped short of calling it a deceit device. the comedy contests the allegation saying it met all regulatory requirements. manus: question seven raised about james comey being able to keep his job. department justice internal watchdog opening an

investigation into his handling of hillary comes a female server. the inspector general will examine whether the fbi failed to follow appropriate procedures. anthony scare bochy alvaro sky bridge capital has been named an assistant to president-elect donald trump according to people familiar with the matter. dena pollack, head of investing at golden sachs, will be an assistant and senior counselor for economic initiatives. anna: cutting bonuses for investment bankers around 15%. manus: firing 20 managers because fees declined. the layoffs were part of an annual performance review. they were more than usual. that comes as morgan stanley reduced compensation costs. reducing it by 11% in the first nine months of 2016. anna: global news 24 hours a day

powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . juliet i stood you down too early for a friday 15 minutes ago. juliette: [laughter] i think you've done that before. i could have walked out that i decided to stay. a little mixed on the asia equity picture but over the weekend has been a great one. this is the only day suits week we have seen the rent. the index on track for yet another weekly gain. tepid export coming down from china. shanghai composite has closed lower by .2%. shenzhen hit hard. hong kong has come back, led by energy players by .3%. the hang seng has now been in the black for the past six out

of seven sessions. a solid week coming through for the equity market. downalia close lower, 0.8%. it was and bull market territory. we have seen the neck very much affected by the fact that the yen has given down back gains at the dollar. samsung's vice-chairman being interviewed for 22 hours by prosecutors. the bank of korea leading interest rates on hold as widely expected. mixed across the region but a solid week for asian investors today. anna: thank you very much. says the u.s. economy faces no serious short-term obstacles. it must deal with important long-term challenges and low productivity and growing inequality. janet yellen said one sign of the success of an economy -- one sign of economic -->> if we are doing work

successfully, our hope is the economy will generally function well. if that is happening instead of being on page one we can be back on page 19 in the newspapers. not in the headlines. joining us now on set is can ask her. director and cio at acumen management. there is a colts host of directions we can go with these conversations. the first and probably most important is that you have three fed presidents now talking about unwinding the balance sheet. given the week we have had, where are we in the great reflation trade? let's start their first of all takene our last guess has his bond solutions off and says reflation is on the way. it could be.

i don't think it is as much of a certainty is most people believe it to be. i don't think it is as much as a certainty as november of last year. in the last couple of days it has been testament to that. a testament to the phenomenon and the markets we have coined as consensus without conviction. this probably the third year we are seeing this phenomenal surface. marketind of the entire being positioned one way. the slight mention of a little something they come running for the exit doors. we saw it in the beginning of 2015 on the back of four proposed fed hikes. we saw in 16 in the first four days on china wobbles. now we are seeing it again as the certainty of what trump may or may not deliver and how quickly this will come. it is becoming a little questionable. anna: why are you not as convinced? is it because the market lacked conviction you think?

how much donald trump can get through capitol hill in the reality of this story? ken: for us, yes, but the pace in which the fed would be obliged to hike rates on the back of and for stricter spending. it is an easy story to buy, certainly easy to get a position in. that is what we saw everyone to very very quickly. probably too quickly because they did not want to be left out. manus: you said the conviction would have to weigh quicker than an ice cream at a weight watchers meeting. suppose if you look at the 30tions that took place, year paper could not give it away. that is an interesting paradox. a shift.

the that continue in your mind? if we look at the 10 year rather than the 30 year, there is room for a bit more flattening. what we have seen as more function of what your previous guests mentioned. how much further that goes, what does it depend on and the data that comes over the next couple of weeks? the afternoon we have got like and retail sales and the u.s.. that might give us our first in -- inkling.nkling anna: did you get an instant insight in how much volatility to expect this week when we saw markets move so much on something that donald trump did not say when he wasn't even expected to talk about that subject anyway?

then not talking about fiscal stimulus. aroundements in markets an expectation that had been built up. what volatility do we get when they start to talk about stuff? the dollar, the strength, will he let that stand? will he treat about that -- tweet about that? ken: whether you are talking to here's something what we got was everything but president. it was not serious. some sort of platform. i think that is what may have given the market the shakes. as far as his attention on what the dollar may do over the course of the next few months, ironically i think he is going to be quite proud of the fact that america has a strong dollar. i don't think you look at the

actual applications of what that means for the monetary policy. anna: the on shoring of manufacturing he wants to drive through. he will see that is all strong and all good. it does not mesh with policy. manus: stay with us. more to get through. the director of and cio of acumen management. anna: here is something to look at two. bloomberg gives you full coverage of the world economic forum area highlights its year include a panel on the future of finance, guests included deutsche bank ceo on tuesday. manus: we bring you a discussion on the crisis of the middle class. christine lagarde, finance minister and others. we are live throughout the week on tv and radio. anna: up next on "bloomberg daybreak" the break -- big bank earnings.

a preview when we come back. this is bloombeg.

anna: welcome back. it is berlin waking up at 8:17. suggesting we will be a little bit stronger start at the beginning of the european trading day. let's turn to china. global demand weighing on sales. shipments dropping by 6.1% from a year earlier. the country also asking some banks to stop processing cross-border yuan. according to a number of people familiar with the matter. cio of acumen management still with us. when you see this drip of capital control coming through arounde pboc, individuals at what they can do or companies and what they are

allowed to do, how much does that raise flags for you and give you underlying concern about the chinese economy or do you say they have great control and levers at their disposal and can keep that going? ken: the size of the economy is the capability of what they can do. tools.to mehest of it seems more of this is what we can do. we choose between this here today and we choose to raise or drop the rate at any point in time. etc.. to me it is not a big concern. growth, whatial was it, on the 23rd of december mark that it could well be a .ource of 6.5% per year they are looking at tempering the world's expectations. anna: tempering the water. manus: it is amazing what five

days does not market. monday i was jumping up and down. it was getting very excited about a reflation. exports are down nine months in a row. the reality is the boom we have been talking about, do you believe in that? you come at the end of week two. you have had more data and more time to assimilate. do you worry too much about this china data? nine months in a row exports have dropped. the market needs to temper expectations. the fact that the rest of the --ld is not buying is must as much from china is systematic of effect of while there is growth it is not as criminal as everyone wants. frankly there is nothing wrong with that. what theo understand

last eight years have been all about. it is not just flick a switch and we are back to where we were 10 years ago. i would rather see what we are seeing which is keeping the growth as a reasonable pace with the occasional peak and trough. overall on a standard sort of to a bigor them back boom. anna: how do you trade around that tempered growth story? as the dollar still in the cross hairs? it is a lazy proxy trade for china to be frank. anna: feeling lazy friday clearly. [laughter] themain justification is australian dollar is commodities and china. i am sorry but that is not play well. trade?what is the smart ken: it is just picking your moments.

realistically, i think being cautious of what the commodity bubble is doing and you have to acknowledge the vast majority of the commodities in the last couple of months is purely speculative rather than fundamentals. if you're willing to say that that is probably not a bad idea. manus: you might say a rally in crude? marcus: you might. you. good to see director and cio at acumen management. manus: a bloomberg business flash. julia is with us. happy friday. juliette: boeing has won an order for 205 planes from indian budget airlines spice jet. jetseal includes 100 building on an existing order for 65. they have the option to buy 50 more including white bodies. the order is worth $22 billion.

nintendo shares fell in tokyo trading after announcing details of its new gaming console. the switch will go on sale in march 3 at a price of $300. it comes with a new feature, and online gaming network. samsung electronics shares have fallen after facing 22 hours of questioning and eight suspects in the south korean influence scandal. investigators say's chargers mate widened to include allegations of investment and breach of duty. the heir to the country's richest family has denied any wrongdoing. chairman replacing cyrus. really known as chandra he has been the head of the biggest exporter since 2009.

in that time the profits quadrupled and the stock tripled. exporterhe is also on the boarf india's central bank. check off the shares surged in tokyo. the troubled company and the u.s. justice department may and out a settlement as soon as to 17on airbags linked deaths worldwide. according to people with knowledge of the matter it could pay a fine as is much as a billion dollars and face possible criminal charges. a settlement would allow to comes up to move forward with a search for a buyer. that is your bloomberg business flash. think you very much. let's turn attention to the banking sector in america. reporting earnings before the opening bell. morgan stanley is coming bonuses by ron 15% and firing 20 managing directors because of .he declining

joined by michael moore on set with us. from thewe expecting today? ken: you are getting --michael:? on the trading site you are actually seeing things bounce back from what was a pretty rough quarter last week -- last year. could be the biggest jump since 2009 for the first quarter. manus: if that is the backdrop my question is, one of the stories we got this morning in job cuts. bonuses being cuts. etc.. why are we seeing the job cuts and the bonuses getting cut back? it is because of costs? what are the biggest drivers of the stories of 2016. obviously going to carry into 2017. is that a fair estimate? michael: i think costs remain a

big question. quarter thaturth is looking better than we have seen recently. for the full year things were not tremendous. it wasn't ok year. you still have a lot of secular issues. holding moreis capital, returns are down. manus: the five biggest investment banks are expected to have risen by 20%. bond trading has really rocked in the back quarter. ken: the third and fourth -- michael: third and fourth quarters are good for trading. even with a pickup they have a larger story on the cost side. anna: what effect can trump have when you look at the regulations. in onyellen was weighing the bank regular vision cited saying she would not want to see dodd-frank change the rollback. what is the expectation in the sector around trump? michael: even if regular edition

does not get rolled back at least it is going to stop hitting worse for the banks. i think there is an animal theit boost from trump as thought is maybe volker gets pulled back. you are not going to see a massive trade because they said then through this five years of restructuring. unit there is rollback the banks will be a little cautious and how they attack that. hiring.enting of the let's see were the three banks deliver. thank you very much from financing. anna: that is it for daybreak europe today. -- "bloomberg daybreak" today. actually session was slightly negative but not by much.

looks like we could be higher across europe. questions being asked about what trump will deliver. london waking up to a very cold morning. have a good weekend everybody. this is bloombeg.

guy: friday the 13th. welcome to "bloomberg markets." this is the european open. your first trade of the cash session coming up shortly. i'm guy johnson. matt miller is in berlin. hogwash. that is sergio marchionne, what he's calling the u.s. diesel emissions charge. could fiat chrysler survive the kind of volkswagen scale fine? the coast is clear. fed chair janet yellen says